NEW DELHI (Commodity Online) : In an attempt to promote competition, efficiency and prevent market domination in the coal sector, India plans to introduce a coal sector regulator and limited auction of coal mines.

According to reports, a draft cabinet note has been prepared for a regulator with power to grant licences, fix prices, set and enforce standards.

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A regulator has become necessary as several end-user industries have been given mining licences, and they may soon be allowed to sell part of their produce in the open market.

At the same time, India wants to bring in a transparent system of auctions to reduce the chances of scams in block allocation.
At present, coal-bearing land is allocated to steel mills, power plants and cement factories by the central government on the recommendations of state governments, but often questions of lack of transparency arise.

The coal regulator, mooted by the Prime Minister’s Office several years back, had been supported by the Planning Commission.Regulators now exist for oil and gas, and telecom.
India's Planning Commission had last year framed a draft bill on regulators, which it wants to be the model for all sectors.

Besides the regulator, analysts said amendments to the Mines and Minerals (Development & Regulation) Act 1957, which is expected to be passed either by Parliament in the next session or as an ordinance, would introduce competitive bidding for coal blocks.

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